Sol Citrus, A Small Orchard that Produces only Organic Citrus Fruit, Has Faced New Competition

Question: Sol Citrus, a small orchard that produces only organic citrus fruit, has faced new competition ever since Mega Citrus, a much larger orchard from a neighboring state, began shipping fruit across state lines. In an attempt to increase its market share and take business away from Sol Citrus, Mega Citrus recently began competing directly with Sol Citrus at local farmers’ markets, selling non-organic oranges at a price per pound that is 30% lower than Sol Citrus’s current price. Although most of the patrons of those farmers' markets consider low prices to be a priority when selecting fruit, the owners of Sol Citrus have decided that they will not lower current orange prices in response to Mega Citrus's move.

Which of the following, if true, best explains Sol Citrus’s decision not to lower prices?

(A) Some consumers consider higher prices to a be a sign of higher quality.
(B) In each of the five years before Mega Citrus began shipping fruit across state lines, sales of Sol Citrus oranges at local farmers' markets exceeded combined sales of oranges from all other orchards selling fruit at the markets.
(C) If Sol Citrus were to lower its prices by just 20%, most of its regular farmers' market customers would continue buying Sol Citrus oranges instead of Mega Citrus oranges.
(D) When purchasing citrus fruit, most customers of the farmers' markets consider the fruit’s classification as "organic" to be more important than the cost of the fruit.
(E) Unlike Sol Citrus, Mega Citrus grows genetically modified fruits sprayed with pesticides that are illegal in the state in which Sol Citrus is located.

“Sol Citrus, a small orchard that produces only organic citrus fruit, has faced new competition ever since Mega Citrus, a much larger orchard from a neighboring state, began shipping fruit across state lines.”- is a GMAT critical reasoning passage with answers. This particular GMAT critical reasoning topic has been taken from the book “GMAT CR Practice Question 10.” Candidates need a strong knowledge of English GMAT critical reasoning. This GMAT critical reasoning question consists of a comprehension question and 4 options to choose from. The GMAT critical reasoning questions are designed for the purpose of testing candidates’ abilities in understanding, analyzing, and applying information or concepts.

Answer: D
Explanation: This is a GMAT critical reasoning question. We have to find the option that best explains Sol Citrus’s decision not to lower prices.

Let’s go through each of the available options and select the most suitable one.

Option A: Some consumers consider higher prices to be a sign of higher quality.

This option is incorrect because even in case some of the customers consider higher prices as a sign of higher quality, most customers at these markets prefer the low prices for the products. So, this does not explain Sol Citrus’s decision. Option A is incorrect.

Option B: In each of the five years before Mega Citrus began shipping fruit across state lines, sales of Sol Citrus oranges at local farmers' markets exceeded the combined sales of oranges from all other orchards selling fruit at the markets.

This option is incorrect because it is of no concern how successful Sol Citrus was before Mega Citrus arrived in the markets. All we need to know about is what is the status at present. If Mega Citrus is offering better prices now, it is a possibility that it will steal Sol Citrus’s business. So, Option B is incorrect.

Option C: If Sol Citrus were to lower its prices by just 20%, most of its regular farmers' market customers would continue buying Sol Citrus oranges instead of Mega Citrus oranges.

This option is incorrect because this option explains that Sol Citrus should lower its prices and also talks about how much lower it can bring its prices to increase its market share. It does not explain why Sol Citrus should lower its prices. Option C is incorrect.

Option D: When purchasing citrus fruit, most customers of the farmers' markets consider the fruit’s classification as "organic" to be more important than the cost of the fruit.

This option is correct because it talks about how most of the customers consider the fruit's classification as "organic" or “inorganic” to be more important than the price of the fruit. Since Sol Citrus produces only organic citrus fruit, this can explain why customers are willing to pay more for fruit from Sol Citrus. Option D is correct.

Option E: Unlike Sol Citrus, Mega Citrus grows genetically modified fruits sprayed with pesticides that are illegal in the state in which Sol Citrus is located.

This option is incorrect because we can not just assume that Mega Citrus grows genetically modified fruits sprayed with pesticides. Also, this is not relevant to the argument presented in the passage. So, Option E is incorrect.

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